Passenger Vehicle Sales Slide As Auto Industry Reports Tepid Sales in May 2024: FADA

The Federation of Automobile Dealers Associations released the industry sales numbers for the month of May 2024. The industry reported tepid sales for the month with cumulative sales up just 2.61 per cent year-on-year with 22,89,603 units sold in the month. Sales were down 5.28 per cent month on month in comparison to April 2024 with the dealer body citing the ongoing elections, lack of marketing activities and the weather as contributing factors to the slowdown.

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In the two-wheeler category sales for the month grew 2.48 per cent year-on-year from 14,97,778 units to 15,34,856 units though numbers were down 6.61 per cent over April 2024 (16,43,510 units). Passenger vehicles sales meanwhile slumped to 3,03,358 units – down 0.96 per cent over last year (3,06,305 units) and down 9.48 per cent compared to April 2024 (3,35,123 units).

“The two-wheeler segment grew by 2.5% YoY but declined by 6.6% MoM. Dealers reported supply constraints, lack of OEM marketing activities and impacts from extremely hot weather and elections. Positive rural demand due to expected good monsoon and improved finance availability were also noted which kept the counters ticking,” said Manish Raj Singhania, FADA President.

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For passenger vehicles, Singhania also cited the impact of the elections, weather and lack of new models and marketing activities by companies as factors behind the decline in sales. Singhania also noted a decline in footfall at dealerships due to the extreme hot weather as well as an increased number of customer postponements and as reduced enquiries.

The three-wheeler segment however continued to see positive growth both year-on-year and month-on-month. With 98,265 units sold in May 2024, sales in the category were up 20.09 per cent over May 2023 and up 22.67 per cent as compared to April 2024 (80,105 units).

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Sales in the tractor segment were up month-on-month from 56,625 units in April 2024 to 70,065 units in May 2024. Year-on-year though sales were down 1.06 per cent. Commercial vehicles sales meanwhile reported a 4.07 per cent growth year-on-year rising from 79,807 units in May 2023 to 83,059 units last month. Sales however were down compared to April 2024 where 90,707 units were sold.

Coming to the near-term outlook, FADA said that it expected the conclusion of elections to bring some stability and improve market sentiment. Additionally, the dealer body said that the predicted strong monsoons could help enhance rural demand. The body however said that the industry still faced challenges including liquidity issues, high inventory levels and low customer enquiries.